Antitrust tribunal orders Telefónica to unbundle broadband packages

Friday, March 5, 2010

Chile's antitrust tribunal TDLC has sided with Chilean IP telephony enabler RedVoiss' complaint that Telefónica Chile has participated in unfair pricing, TDLC announced on its website.

The finding is that Telefónica basically requires clients to contract bundled services, as the price for these packaged services is significantly lower than if they were to be contracted on their own. TDLC fined Telefónica an amount equivalent to roughly US$4.4mn.

"As long as TCH [Telefónica Chile] is the dominant player in broadband services, it cannot bundle any other product or service to it [broadband]; as such it must offer naked broadband," according to the tribunal's finding.

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RedVoiss CEO Alberto Mordojovich celebrated the finding, although it is appealable. "After two and a half years of hard work with the TDLC... this decision will allow for the sale of naked broadband, and I hope it will mean a lowering of internet access prices for many Chilean families and companies," he told BNamericas in an emailed statement.

"The flagrant abuse that this situation represented provides evidence of the vulnerability of telecommunications consumers facing a dominant monopoly," he added, also criticizing sector watchdog Subtel and its apparent lack of defending consumers. And Chile's telecommunications law, dating from 1983, "falls apart like our adobe houses in the last earthquake," he said.

In July 2007, RedVoiss won a 228mn-peso (currently US$480,000) suit against Telefónica for blocking RedVoiss' broadband clients from accessing its Voissnet service. RedVoiss immediately filed a second lawsuit accusing the operator of unfair pricing of its packaged services.

"It's inefficient to have to go to trial to slowly remove the roadblocks that Telefónica has put in the way to internet development in Chile. We've already won two [trials, but] it isn't the role of a small company [such as RedVoiss] with 45 employees that is innovating," Mordojovich said.

"RedVoiss is older than Skype. Would Skype have been able to take off in Chile?" he asked rhetorically.

For a full copy of the 40-page TDLC finding, in Spanish, use this link

In Chile, Telefónica operates under the Movistar brand. It is owned by Spanish giant Telefónica (NYSE: TEF). The company was not immediately available for comment when contacted by BNamericas.